MoranElkarifNews: UK raises cloud competition concerns, names Microsoft and Amazon as dominant players

LONDON — Britain’s antitrust watchdog on Tuesday raised concerns over competition in the multi-billion-pound cloud computing market and singled out Microsoft and Amazon as the dominant players.

An independent Competition and Markets Authority inquiry group provisionally recommended that the regulator considers investigating Amazon Web Services (AWS) and Microsoft’s Azure cloud unit under new digital markets legislation.

In a statement, the CMA said it estimates the cloud services market was worth £9 billion ($11.18 billion) in 2023 — a figure growing over 30% year-on-year.

The CMA said that, currently, businesses face a limited choice of providers when it comes to cloud services.

The regulator called AWS and Microsoft “the two large providers of cloud services, each with a share of up to 40% of UK customer spend on cloud services.”

Notably, it added Google was the third-biggest provider “with a much smaller share.”

Previously, the CMA said it was concerned by several elements of the cloud market that could pose competition issues, including so-called “egress” fees on transfers of data from one cloud to another, licensing fees, volume discounts, and interoperability issues that make it harder to switch vendor.

The CMA probe traces its history back to 2022, when U.K. telecoms regulator Ofcom kicked off a market study examining the dominance of cloud giants Amazon, Microsoft and Google. Ofcom subsequently referred its cloud review to the CMA to address competition issues in the market.

Cloud infrastructure services is a market dominated by U.S. technology giants Amazon and Microsoft. Amazon is the largest player, offering cloud services via its Amazon Web Services (AWS) arm. Microsoft is the second-largest, selling cloud products under its Microsoft Azure unit.

This is a breaking news story. Please check back later for updates.